Consumer Behavior - Exam 2

b.c.

attitude

an overall evaluation of an object (person, place, thing) of whether it is good or bad in your opinion.

attitude characteristics

learned, stored in memory, can be positive or negative, have strength and direction; not perfectly stable.

attitude objects

products, brands, people, actions, and/or social issues.

are attitudes stable?

no!

example 1: nice weather can increase reported life satisfaction.

example 2: small waiting rooms can increase apartment satisfaction ratings.

assimilation effect

judgement shifts TOWARDS reference points.

example: nice weather —> life feels better.

contrast effect

judgment shifts AWAY from reference point.

example: small waiting rooms —> apartment looks larger.

ABC Model of Attitudes

attitude has three components: affect, behavior; cognition.

ABC Definitions

(1) affect- feelings.

(2) behavior- actions or intentions.

(3) cognition- beliefs and thought.

Multi-Attribute Attitude Model (MAAM)

(1) identify attributes

(2) determine weights (importance weight)

(3) determine beliefs (belief rating)

(4) multiply and add scores

Why do Marketers Use MAAM?

-improve attribute ratings

-change importance weights

-strengthen associations

-add new attributes

-lower competitor evaluations

Theory of Planned Behavior

Consists of 3 components: (1) attitude- feelings about performing behaviors. (2) subjective norm- what important people think you should do. (3) perceived behavioral control- whether you feel capable of doing it.

Predicts behavior better than MAAM.

Result of Theory of Planned Behavior

attitude + subjective norm + perceived behavioral control → intention → behavior.

Cognitive Consistency

people want: thoughts, behaviors, and feelings to be consistent. We value harmony among our thoughts, feelings, and behaviors, and a need to maintain uniformity among these elements to motivate us.

Cognitive Dissonance

occurs when attitudes and behaviors CONFLICT.

Cognitive Dissonance pt. 2

people reduce discomfort by: changing behavior OR changing attitudes.

example: “I bought an expensive phone but it was worth it”.

Persuasion

active attempt to change an attitude.

involvement

perceived importance of a topic to a person.

higher involvement

more thinking and more information processing.

lower involvement

less thinking and more reliance on cues.

Elaboration Likelihood Model (ELM)

this model uses levels of involvement.

low involvement → peripheral

high involvement → central

high involvement = central processing route

System 2 - SLOW persuasion

- consumers use “central processing”: more extensive processing of relevant attributes.

-strength of arguments matter.

low involvement = peripheral processing route

System 1 - FAST persuasion

-consumers use “peripheral processing”: less extensive processing of relevant attributes.

-peripheral cues produce persuasion.

Central Route Processing

Used when involvement is HIGH

Consumers focus on: logic, facts, evidence, and strong arguments.

Produces: stronger attitudes and longer-lasting attitudes.

Peripheral Route Processing

Used when involvement is LOW.

Consumers focus on: attractiveness, credibility, celebrity endorsers, humor, fear, and repetition.

Behavioral Influence Approach

If you can get someone to try a product: behavior —> attitude change.

examples: coupons, samples, and free trials.

Fear Appeals

Work best when: (1) threat is moderate, (2) solution (your product) exists, and (3) consumer believes solution works.

TOO much fear will backfire.

Consumer Decision Making Types

routine, limited, and extensive.

Routine Decision Making

low involvement and little thought; example: the tooth paste you buy.

Limited Decision Making

moderate involvement and moderate thought; example: the jeans you buy.

Extensive Decision Making

high involvement and much thought: examples: the house and car you buy.

decision making map

the higher the information processing goes up and higher involvement goes up, so does the type of decision making.

Stages of Decision Making

Stage (1): Need Recognition

Stage (2): Information Search

Stage (3): Evaluation of Alternatives

Need Recognition

Gap between the desired state and the actual state; creates the need.

Information Search

Internal Search - memory.

External Search- personal, commercial, experiential; public sources.

Evaluation of Alternatives

consumers compare options using: determinant criteria and choice overload.

determinant criteria

attributes that actually drive the choice.

examples for a phone: price, brand, quality, and battery life.

Choice Overload

too many options can: increase anxiety, reduce satisfaction, and increase regret.

Decision Strategies

non-compensatory and compensatory.

Non-Compensatory- bad score cannot be offset.

lexicographic, satisficing, and elimination by aspects.

Lexicographic

choose BEST option on most important attribute.

Satisficing

first option meeting MINIMUM cutoff.

Elimination by Aspect

Remove options FAILING cutoff criteria.

Compensatory- tradeoffs allowed.

weighted averages, equal weight; majority of confirming dimensions.

weighted average

multiply: weight x rating; add the scores.

equal weight

treat all attributes equally.

majority of confirming dimensions

pairwise comparison.

Heuristics

mental shortcuts; can lead to biases.

Brand Loyalty

“I buy what I bought before”

Brand Familiarity

“I recognize it, so it must be good”

Family Influence

Buy what parents bought

Availability Heuristics

Judge likelihood by how easily examples come to mind.

example: people think car crashes are more common than lung cancer because they are reported more.

key factors: vividness and recency.

representativeness heuristic

judge likelihood based on similarity to stereotype.

examples: Steve librarian problem; Linda bank teller problem.

Anchoring and Adjustment

Initial anchor influences estimates; people adjust insufficiently.

Compromise Effect

people avoid extremes, middle option often wins; consumers pick the medium.

Endowment Effect

ownership increases value.

example: people value something more once they own it.

Relativity of Money

consumers respond to percentage savings.

example: saving $8 on a $20 item feels bigger than saving $8 on $800.

Joint vs. Separate Evaluation

Joint: compare side by side; focus on measurable differences.

separate: focus on actual experience.

Prospect Theory

people evaluate outcomes relative to a reference point.

main concepts: loss aversion and framing effects.

loss aversion

losses hurt MORE than gains feel good psychologically.

example: lose $100 is worse than gaining $100.

Framing Effects

different wording changes the decisions.

example: 95% fat vs. 5% fat free

same outcome, different decisions.

mental acounting

consumers place money into SEPARATE mental accounts; money is NOT psychologically identical.

four rules to mental accounting

1) segregate gains

2) integrate losses

3) silver lining effect

4) cancel losses against gains

segregate gains

two gains is better than one combined gain.

integrate losses

one loss is better than multuple separate losses.

silver lining effect

separate small gains from large gains.c

cancel losses against gains

bundle small losses into larger gains.

nudging

small changes in decision environment influence behavior; people stick with the DEFAULT option.

post purchase experience

consumers are either satisfied or dissatisfied.

satisfaction

positive evaluation.

dissatisfaction

negative evaluation; it takes 12 positive experiences to offset one negative experience.

outcomes of satisfaction

loyalty, repeat purchases, and positive word of mouth.

outcomes of dissatisfaction

complaints, returns, switching, and negative word of mouth.

expectancy disconfirmation theory

consumers compare: expected performance against actual performance.

confirmation

expectation = reality

positive disconfirmation

performance is greater than the expectation.

negative disconfirmation

expectation is greater than the expectation.

attribution theory

consumers ask: “why did this happen?”

3 dimensions: locus, stability, and controllability.

locus

whose fault is it?

stability

will it happen again?

controllability

could the company prevent it?

when does dissatisfaction decrease?

-firm caused problem

-problem is recurring

-firm controlled outcome

fundamental attribution effor

success: internal attribution

example: “I succeeded because I am smart”

failure: external attribution

example: “I failed because the company messed up”

complaints

-companies WANT complaints because they allow recovery BEFORE negative word of mouth spreads.

-most dissatisfied customers NEVER complain.

-they typically leave and tell others of their bad experience.

service recovery CREST

c - calm

r - repeat

e - empathize

s - solve

t - timely response

service recovery paradox

a customer can become MORE satisfied after an excellent recovery than if NOTHING had gone WRONG.

key phrase: “a delighted customer rather than merely a satisfied customer”